UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-7582
The Valiant Fund
--------------------------------------------------
(Exact name of registrant as specified in charter)
871 Venetia Bay Boulevard, Venice, FL, 34292
--------------------------------------------------
(Address of principal executive offices) (Zip code)
Denis R. Curcio
871 Venetia Bay Boulevard, Venice, FL, 34292
--------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-242-9340
Date of fiscal year end: 8/31/04
Date of reporting period: 2/29/04
The registrant, an open-end investment company registered pursuant to Section
8(b) of the Investment Company Act of 1940 (the "Act"), has not filed a
registration statement that has gone effective under the Securities Act of 1933
(the "1933 Act") because beneficial interests in the registrant are issued and
sold solely in private transactions that do not involve any public offering
within the meaning of Section 4(2) of the 1933 Act. Accordingly, this report is
not filed under Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934.
ITEM 1. REPORTS TO STOCKHOLDERS.
THE VALIANT FUND
SEMI-ANNUAL REPORT
FEBRUARY 29, 2004
THE VALIANT FUND
Annual Report - August 31, 2003
Table of Contents
PAGE
----
U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 1
Statement of Assets and Liabilities 2
Statement of Operations 2
Statements of Changes in Net Assets 3
Financial Highlights 4
GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 6
Statement of Assets and Liabilities 8
Statement of Operations 8
Statements of Changes in Net Assets 9
Financial Highlights 10
TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments 12
Statement of Assets and Liabilities 14
Statement of Operations 14
Statements of Changes in Net Assets 15
Financial Highlights 16
U.S. TREASURY INCOME PORTFOLIO
Statement of Assets and Liabilities 17
Statement of Changes in Net Assets 18
Financial Highlights 19
Notes to Financial Statements 20
Management of the Trust 24
VALIANT U.S. TREASURY MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 29, 2004 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ------------- -------------
U.S. TREASURY OBLIGATIONS - 52.3%
U.S. TREASURY BILL - 27.7% 3/4/04 $ 120,000,000 $ 119,991,333
-------------
U.S. TREASURY NOTES - 24.6%
3.38% 4/30/04 10,000,000 10,034,080
3.25 5/31/04 15,000,000 15,075,895
2.88 6/30/04 35,000,000 35,210,248
6.00 8/15/04 10,000,000 10,222,390
5.88 11/15/04 35,000,000 36,111,154
-------------
106,653,767
-------------
TOTAL U.S. TREASURY OBLIGATIONS (AMORTIZED COST $226,645,100) 226,645,100
-------------
REPURCHASE AGREEMENTS - 47.5%
Bank of America, Inc., 1.02%, due 3/1/04, with a
maturity value of $45,003,638 (Collateralized by
various 0.0% - 6.0% GNMA bonds valued at $45,900,000
with maturity dates 2/20/2030 - 2/20/2034) 45,000,000 45,000,000
Citigroup, Inc., 0.97%, due 3/1/04, with a
maturity value of $45,003,825 (Collateralized by
various 2.875% - 8.0% GNMA bonds valued at $45,900,000
with maturity dates 6/15/2014 - 2/20/2034) 45,000,000 45,000,000
J.P. Morgan Chase & Co., 1.01%, due 3/1/04, with a
maturity value of $60,505,092 (Collateralized by various
4.0%-8.0% GNMA bonds valued at $61,712,610
with maturity dates 2/15/2008 - 3/15/2045) 60,500,000 60,500,000
UBS Paine Webber, 1.01%, due 3/1/04, with a maturity
value of $55,004,629 (Collateralized by various 3.0% - 4.0%
GNMA bonds valued at $56,101,406
with maturity dates 8/20/2032 -10/20/2033) 55,000,000 55,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $205,500,000) 205,500,000
-------------
TOTAL INVESTMENTS (AMORTIZED COST $432,145,100) (a) - 99.8% 432,145,100
OTHER ASSETS LESS LIABILITIES - 0.2% 726,722
-------------
TOTAL NET ASSETS - 100% $ 432,871,822
=============
- -----------------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
GNMA - Government National Mortgage Association
See notes to financial statements.
1
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004 (UNAUDITED)
ASSETS:
Investments, at value $ 226,645,100
Repurchase agreements 205,500,000
-------------
Total investments 432,145,100
Cash 26,479
Receivables:
Interest 1,050,645
Other 3,825
-------------
TOTAL ASSETS 433,226,049
LIABILITIES:
Payables:
Dividends $ 142,773
Accrued expenses and other liabilities:
Investment manager 66,635
Distribution and shareholder servicing 144,819
-------------
TOTAL LIABILITIES 354,227
-------------
NET ASSETS $ 432,871,822
=============
COMPOSITION OF NET ASSETS:
Capital $ 433,075,885
Undistributed net investment income 47,615
Accumulated net realized loss from
investment transactions (251,678)
-------------
NET ASSETS $ 432,871,822
=============
Class A Shares
Net assets $ 1,172,372
Shares outstanding 1,171,208
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 142,022,575
Shares outstanding 142,091,638
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 262,448,202
Shares outstanding 262,570,275
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 27,228,673
Shares outstanding 27,242,770
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 2,414,640
Securities lending income 24,795
-----------
TOTAL INVESTMENT INCOME 2,439,435
EXPENSES:
Investment manager $ 458,860
Distribution and shareholder servicing:
Class A Shares 11,288
Class B Shares 235,866
Class D Shares 689,578
Class E Shares 104,246
-----------
Total expenses before contractual
fee reimbursements 1,499,838
Contractual fee reimbursements (59,224)
-----------
NET EXPENSES 1,440,614
NET INVESTMENT INCOME 998,821
-----------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS 406
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 999,227
===========
See notes to financial statements.
2
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 29, 2004 YEAR ENDED
(UNAUDITED) AUGUST 31, 2003
----------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 998,821 $ 4,051,122
Net realized gain from investment transactions 406 1,110
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 999,227 4,052,232
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (27,971) (88,008)
Class B Shares (460,866) (1,304,296)
Class D Shares (501,162) (2,299,594)
Class E Shares (8,822) (359,224)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (998,821) (4,051,122)
------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS (15,532,403) (136,255,956)
------------- -------------
NET DECREASE IN NET ASSETS (15,531,997) (136,254,846)
NET ASSETS:
Beginning of period 448,403,819 584,658,665
------------- -------------
End of period (including undistributed net investment income of $47,615
at February 29, 2004 and August 31, 2003) $ 432,871,822 $ 448,403,819
============= =============
See notes to financial statements.
3
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS,CLASS A SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
-------------------- -------- -------- ------- -------- -------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- ------- -------- -------
INVESTMENT ACTIVITIES
Net investment income 0.005 0.012 0.021 0.05 0.06 0.05
Net realized gain (loss) from investment
transactions 0.000 * 0.000 * 0.000 * (0.00) * (0.00) * (0.00) *
---------- -------- -------- ------- -------- -------
Total from investment activities 0.005 0.012 0.021 0.05 0.06 0.05
---------- -------- -------- ------- -------- -------
DIVIDENDS
Net investment income (0.005) (0.012) (0.021) (0.05) (0.06) (0.05)
---------- -------- -------- ------- -------- -------
Total dividends (0.005) (0.012) (0.021) (0.05) (0.06) (0.05)
---------- -------- -------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======= ======== =======
TOTAL RETURN (a) 0.43% 1.22% 2.05% 5.30% 5.66% 4.77%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1,172 $ 7,159 $ 7,260 $10,355 $ 15,725 $15,088
Ratio of expenses to average net assets,
before fee waivers and / or expense
reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average
net assets 0.87%(b) 1.21% 2.12% 5.13% 5.55% 4.69%
FINANCIAL HIGHLIGHTS, CLASS B SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------- -------- -------- -------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- -------- ------- -------
INVESTMENT ACTIVITIES
Net investment income 0.004 0.010 0.018 0.05 0.05 0.04
Net realized gain (loss) from investment transactions 0.000 * 0.000 * 0.000 * (0.00) * (0.00) * (0.00) *
------------ -------- -------- -------- ------- -------
Total from investment activities 0.004 0.010 0.018 0.05 0.05 0.04
------------ -------- -------- -------- ------- -------
DIVIDENDS
Net investment income (0.004) (0.01) (0.02) (0.05) (0.05) (0.04)
------------ -------- -------- -------- ------- -------
Total dividends (0.004) (0.01) (0.02) (0.05) (0.05) (0.04)
------------ -------- -------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
============ ======== ======== ======== ======= =======
TOTAL RETURN (a) 0.31% 0.96% 1.80% 5.04% 5.39% 4.51%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 142,023 $126,617 $146,246 $117,213 $41,893 $64,266
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 0.62%(b) 0.95% 1.77% 4.44% 5.20% 4.42%
* Less than $0.005 per share.
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(b) Annualized
See notes to financial statements.
4
THE VALIANT FUND
U.S. TREASURY MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS D SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 --------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------- -------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
---------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income 0.002 0.008 0.015 0.05 0.05 0.04
Net realized gain (loss) from investment transactions 0.000* 0.000* 0.000* (0.00)* (0.00)* (0.00)*
---------- -------- -------- -------- -------- --------
Total from investment activities 0.002 0.008 0.015 0.05 0.05 0.04
---------- -------- -------- -------- -------- --------
DIVIDENDS
Net investment income (0.002) (0.008) (0.015) (0.05) (0.05) (0.04)
---------- -------- -------- -------- -------- --------
Total dividends (0.002) (0.008) (0.015) (0.05) (0.05) (0.04)
---------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ======== ========
TOTAL RETURN (b) 0.18% 0.71% 1.54% 4.77% 5.13% 4.25%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 262,448 $286,191 $325,896 $339,659 $269,929 $204,713
Ratio of expenses to average net assets 0.70%(c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income to average net assets 0.36%(c) 0.71% 1.54% 4.55% 5.04% 4.16%
FINANCIAL HIGHLIGHTS, CLASS E SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FOR THE PERIOD
FEBRUARY 29, 2004 ----------------------------------------- APRIL 6, 1999 TO
(UNAUDITED) 2003 2002 2001 2000 AUGUST 31, 1999(a)
----------------- ------- -------- -------- -------- ------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
---------- ------- -------- -------- -------- ------------
INVESTMENT ACTIVITIES
Net investment income 0.000** 0.005 0.013 0.04 0.05 0.02
Net realized gain (loss) from
investment transactions 0.000** 0.000** 0.000** (0.00)* (0.00)* (0.00)*
---------- ------- -------- -------- -------- ------------
Total from investment activities 0.000 0.005 0.013 0.04 0.05 0.02
---------- ------- -------- -------- -------- ------------
DIVIDENDS
Net investment income 0.000** (0.005) (0.013) (0.04) (0.05) (0.02)
---------- ------- -------- -------- -------- ------------
Total dividends (0.000) (0.005) (0.013) (0.04) (0.05) (0.02)
---------- ------- -------- -------- -------- ------------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========== ======= ======== ======== ======== ============
TOTAL RETURN (b) 0.04% 0.41% 1.24% 4.46% 4.82% 1.54%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 27,229 $28,437 $105,257 $220,850 $141,693 $ 13,086
Ratio of expenses to average net assets 1.00%(c) 1.00% 1.00% 1.00% 1.00% 0.99%(c)
Ratio of net investment income to
average net assets 0.07%(c) 0.48% 1.32% 4.19% 5.31% 3.81%(c)
* Less than $0.001 per share.
** Less than $0.005 per share.
(a) Commencement of operations.
(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(c) Annualized.
See notes to financial statements.
5
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 29, 2004 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ------------- ------------
COMMERCIAL PAPER - 52.6%
BANKING - 22.7%
Alliance & Leicester PLC 1.24% 10/12/04 $ 25,000,000 $ 24,807,812
Banco Bradesco SA 1.25 6/14/04 20,000,000 19,927,667
Banco Continental de Panama SA 1.08 4/5/04 27,500,000 27,471,125
Banco Cuscatlan, SA 1.08 4/5/04 20,000,000 19,979,000
Banco Rio de La Plata SA 0.97 3/18/04 5,000,000 4,997,710
HBOS Treasury 1.04 5/28/04 15,000,000 14,961,867
------------
112,145,181
------------
BROKER / DEALERS - 4.7%
Goldman Sachs Group, Inc. 1.23 9/1/04 23,000,000 23,000,000
------------
EDUCATION - 4.2%
Johns Hopkins University 1.05 4/7/04 21,000,000 21,000,000
------------
SPECIAL PURPOSE ENTITY - 21.0%
Danske Corp. 1.08 7/9/04 30,000,000 29,884,083
FCAR Owner Trust 1.08 6/2/04 15,000,000 14,958,537
Greyhawk Funding 1.04 5/27/04 15,000,000 14,962,300
Lockhart Funding 1.09 5/25/04 24,139,000 24,076,876
SPARC LLC 1.05 3/10/04 20,000,000 19,994,750
------------
103,876,546
------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $260,021,727) 260,021,727
------------
CORPORATE OBLIGATIONS - 10.8%
FINANCIAL SERVICES - 1.0%
Labelle Capital Funding LLC* 1.18 9/1/26 1,330,000 1,330,000
Wyoming Steel Investment * 1.16 4/1/21 3,700,000 3,700,000
------------
5,030,000
------------
FOOD - 0.3%
Jacksons Food Stores Inc.* 1.15 7/1/09 1,238,000 1,238,000
------------
HEALTH SERVICES - 0.9%
Physicians Center, LP* 1.10 10/1/29 3,570,000 3,570,000
Riverview Medical Office Building* 1.15 11/1/17 900,000 900,000
------------
4,470,000
------------
LEISURE - 0.9%
Commonwealth Country Club, Ltd.* 1.24 11/1/21 3,360,000 3,360,000
Sandusky Yacht Club* 1.15 12/1/21 1,250,000 1,250,000
------------
4,610,000
------------
REAL ESTATE - 4.6%
208 Associates LLC* 1.15 10/1/13 965,000 965,000
Aztec Properties LLC* 1.16 8/1/20 2,168,000 2,168,000
Baird Properties LLC* 1.20 12/1/26 2,210,000 2,210,000
CMW Real Estate LLC* 1.15 6/1/20 2,325,000 2,325,000
El Dorado Enterprises of Miami FL* 1.16 11/1/14 2,000,000 2,000,000
El Dorado Enterprises of Miami FL* 1.11 6/1/20 10,525,000 10,525,000
G & J Properties II* 1.12 9/1/23 1,000,000 1,000,000
Ordeal Properties LLC* 1.15 10/1/12 1,600,000 1,600,000
------------
22,793,000
------------
SPECIAL PURPOSE ENTITY - 3.1%
Barry-Wehmiller Group* 1.12 5/1/18 1,270,000 1,270,000
Best One Tire & Service* 1.12 2/1/18 955,000 955,000
Butler County, Surgical Properties* 1.12 3/1/23 1,440,000 1,440,000
Exal Corp.* 1.12 3/1/09 1,500,000 1,500,000
GCG Portage LLC* 1.23 2/1/26 1,285,000 1,285,000
IHA Capital Development* 1.12 7/1/28 1,500,000 1,500,000
ISO Building LLC* 1.12 3/1/23 1,000,000 1,000,000
MMR Development Co.* 1.12 5/1/23 1,080,000 1,080,000
Taylor Steel, Inc.* 1.15 2/1/23 2,390,000 2,390,000
Village Enterprises* 1.15 4/1/34 1,000,000 1,000,000
Wellington Green LLC* 1.15 4/1/29 1,890,000 1,890,000
------------
15,310,000
------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST $53,451,000) 53,451,000
------------
See notes to financial statements.
6
VALIANT GENERAL MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 29, 2004 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ------------- ------------
CERTIFICATE OF DEPOSIT - 5.7%
BANKING - 5.7%
Harris Trust Bank of Chicago
(AMORTIZED COST $28,000,000) 1.32% 3/1/04 $ 28,000,000 $ 28,000,000
------------
MUNICIPAL NOTES AND BONDS - 7.9%
ALABAMA - 3.9%
Auburn Taxable Revenue, Series B* 1.11 5/1/20 6,755,000 6,755,000
Meadow Brook* 1.10 3/1/31 12,300,000 12,300,000
------------
19,055,000
------------
ILLINOIS - 0.9%
Upper Illinois River Valley Development Authority* 1.15 12/1/21 4,595,000 4,595,000
------------
MICHIGAN -0.4%
Michigan City Industrial Economic Development Revenue* 1.12 10/1/13 1,705,000 1,705,000
------------
NEW YORK - 1.2%
Approach Partnership* 1.15 2/1/19 1,125,000 1,125,000
Cotswold Village Associates LLC* 1.10 6/1/31 5,000,000 5,000,000
------------
6,125,000
------------
OHIO - 0.6%
Hopkins Waterhouse LLC* 1.15 6/1/20 1,000,000 1,000,000
Mercer County, HealthCare Facilities* 1.12 4/1/23 1,960,000 1,960,000
------------
2,960,000
------------
TENNESSEE - 0.9%
Tennessee School Board Authority 1.12 3/8/04 4,500,000 4,500,000
------------
TOTAL MUNICIPAL NOTES AND BONDS (AMORTIZED COST $38,940,000) 38,940,000
------------
UNITED STATES GOVERNMENT AGENCY - 8.1%
Federal National Mortgae Association 1.50 11/16/04 15,000,000 15,000,000
Federal National Mortgae Association 1.62 12/8/04 25,000,000 25,000,000
------------
TOTAL UNITED STATES GOVERNMENT AGENCY (AMORTIZED COST $40,000,000) 40,000,000
------------
REPURCHASE AGREEMENT - 14.8%
Bank of America, Inc., 1.02%, due 3/01/04
with a maturity value of $73,006,205
(Collateralized by various 0.0% - 6.00%, GNMA bonds valued at $74,460,001)
(AMORTIZED COST $73,000,000) 73,000,000 73,000,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $493,412,727) (a) - 99.9% 493,412,727
OTHER ASSETS LESS LIABILITIES - 0.1% 288,436
------------
TOTAL NET ASSETS - 100% $493,701,163
============
- -----------------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces.
The rate shown represents the rate in effect at February 29, 2004. The
maturity date shown reflects next rate change date.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
GNMA - Government National Mortgage Association
LLC - Limited Liability Corporation
LP - Limited Partnership
PLC - Public Limited Company
SA - Sociedad Anonyma (French, Spanish)
See notes to financial statements
7
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004 (UNAUDITED)
ASSETS:
Investments, at value $ 420,412,727
Repurchase agreements 73,000,000
-------------
Total investments 493,412,727
Cash 16,572
Receivables:
Interest 729,142
-------------
TOTAL ASSETS 494,158,441
LIABILITIES:
Payables:
Investments purchased $ -
Dividends 321,124
Accrued expenses and other liabilities:
Investment manager 78,692
Distribution and shareholder servicing 57,462
-----------
TOTAL LIABILITIES 457,278
-------------
NET ASSETS $ 493,701,163
=============
COMPOSITION OF NET ASSETS:
Capital $ 493,783,584
Accumulated net realized loss from
investment transactions (82,421)
-------------
NET ASSETS $ 493,701,163
=============
Class A Shares
Net assets $ 377,093,612
Shares outstanding 377,150,985
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class B Shares
Net assets $ 2,017,227
Shares outstanding 2,017,816
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class D Shares
Net assets $ 67,150,371
Shares outstanding 67,161,356
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
Class E Shares
Net assets $ 47,439,953
Shares outstanding 47,453,428
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
=============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 3,264,593
-----------
TOTAL INVESTMENT INCOME 3,264,593
EXPENSES:
Investment manager $ 565,755
Distribution and shareholder servicing:
Class A Shares 764,016
Class B Shares 11,723
Class D Shares 176,635
Class E Shares 199,081
-----------
Total expenses before contractual
fee reimbursements 1,717,210
Contractual fee waivers and
expense reimbursements (765,146)
-----------
NET EXPENSES 952,064
-----------
NET INVESTMENT INCOME 2,312,529
-----------
NET REALIZED LOSS FROM INVESTMENT
TRANSACTIONS (1,354)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,311,175
===========
See notes to financial statements.
8
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 29, 2004 YEAR ENDED
(UNAUDITED) AUGUST 31, 2003
----------------- ---------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 2,312,529 $ 7,740,349
Net realized gain (loss) from investment transactions (1,354) 14,510
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,311,175 7,754,859
------------- -------------
DIVIDENDS:
Net investment income:
Class A Shares (2,082,814) (6,870,152)
Class B Shares (29,782) (126,461)
Class D Shares (161,243) (327,768)
Class E Shares (38,690) (415,968)
------------- -------------
TOTAL DIVIDENDS TO SHAREHOLDERS (2,312,529) (7,740,349)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS (14,257,855) 10,146,226
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (14,259,209) 10,160,736
NET ASSETS:
Beginning of period 507,960,372 497,799,636
------------- -------------
End of period $ 493,701,163 $ 507,960,372
============= =============
See notes to financial statements.
9
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 ------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------- -------- -------- -------- -------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- -------- -------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.005 0.013 0.022 0.05 0.06 0.05
Net realized gain (loss)
from investment transactions 0.000 * 0.000 * 0.000 * 0.00 * (0.00) * (0.00) *
------------ -------- -------- -------- -------- ---------
Total from investment activities 0.005 0.013 0.022 0.05 0.06 0.05
------------ -------- -------- -------- -------- ---------
DIVIDENDS
Net investment income (0.005) (0.013) (0.022) (0.05) (0.06) (0.05)
------------ -------- -------- -------- -------- ---------
Total dividends (0.005) (0.013) (0.022) (0.05) (0.06) (0.05)
------------ -------- -------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
============ ======== ======== ======== ======== =========
TOTAL RETURN (a) 0.48% 1.29% 2.24% 5.52% 5.97% 5.00%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 377,094 $364,392 $357,676 $380,513 $394,118 $ 254,808
Ratio of expenses to average net assets,
before fee waivers and / or
expense reimbursements 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to
average net assets 0.95% 1.28% 2.22% 5.36% 5.89% 4.91%
FINANCIAL HIGHLIGHTS, CLASS B SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 -------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------- -------- -------- ------- ------- ------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
----------- -------- -------- ------- ------- ------
INVESTMENT ACTIVITIES
Net investment income 0.004 0.010 0.019 0.05 0.06 0.05
Net realized gain (loss) from
investment transactions 0.000 * 0.000 * 0.000 * 0.00 * (0.00) * (0.00) *
----------- -------- -------- ------- ------- ------
Total from investment activities 0.004 0.010 0.019 0.05 0.06 0.05
----------- -------- -------- ------- ------- ------
DIVIDENDS
Net investment income (0.004) (0.010) (0.019) (0.05) (0.06) (0.05)
----------- -------- -------- ------- ------- ------
Total dividends (0.004) (0.010) (0.019) (0.05) (0.06) (0.05)
----------- -------- -------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
=========== ======== ======== ======= ======= ======
TOTAL RETURN (a) 0.35% 1.04% 1.98% 5.25% 5.71% 4.74%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 2,017 $ 10,620 $ 15,719 $ 9,169 $ 4,793 $1,569
Ratio of expenses to average net assets,
before fee waivers and / or
expense reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of net investment income to
average net assets 0.70%(b) 1.03% 1.91% 4.91% 5.61% 4.72%
* Less than $0.005 per share.
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(b) Annualized
See notes to financial statements.
10
THE VALIANT FUND
GENERAL MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS D SHARES
FOR THE
SIX MONTHS ENDED FOR THE FOR THE FOR THE FOR THE PERIOD
FEBRUARY 29, 2004 YEAR ENDED YEAR ENDED YEAR ENDED SEPTEMBER 27, 1999
(UNAUDITED) AUGUST 31, 2003 AUGUST 31, 2002 AUGUST 31, 2001 TO AUGUST 31, 2000 (c)
----------------- --------------- --------------- --------------- ----------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES
Net investment income 0.002 0.007 0.016 0.05 0.05
Net realized gain (loss)
from investment transactions 0.000 * 0.000 * 0.000 * 0.00 ** (0.00) **
----------- ----------- ----------- ----------- -----------
Total from investment activities 0.002 0.007 0.016 0.05 0.05
----------- ----------- ----------- ----------- -----------
DIVIDENDS
Net investment income (0.002) (0.007) (0.02) (0.05) (0.05)
----------- ----------- ----------- ----------- -----------
Total dividends (0.002) (0.007) (0.02) (0.05) (0.05)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
TOTAL RETURN (b) 0.23% 0.79% 1.73% 4.99% 5.10%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 67,150 $ 74,943 $ 40,662 $ 16,861 $ 10,121
Ratio of expenses to average net assets 0.70%(c) 0.70% 0.70% 0.70% 0.70%(c)
Ratio of net investment income to
average net assets 0.46%(c) 0.73% 1.55% 4.81% 5.53%(c)
FINANCIAL HIGHLIGHTS, CLASS E SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FOR THE PERIOD
FEBRUARY 29, 2004 --------------------------------------- MAY 5, 1999 TO
(UNAUDITED) 2003 2002 2001 2000 AUGUST 31, 1999(c)
----------------- ------- ------- ------- ------- ------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
----------- ------- ------- ------- ------- -----------
INVESTMENT ACTIVITIES
Net investment income 0.001 0.005 0.014 0.05 0.05 0.01
Net realized gain (loss) from
investment transactions 0.000 * 0.000 * 0.000 * 0.00 ** (0.00) ** (0.00) **
----------- ------- ------- ------- ------- -----------
Total from investment activities 0.001 0.005 0.014 0.05 0.05 0.01
----------- ------- ------- ------- ------- -----------
DIVIDENDS
Net investment income (0.001) (0.005) (0.014) (0.05) (0.05) (0.01)
----------- ------- ------- ------- ------- -----------
Total dividends (0.001) (0.005) (0.014) (0.05) (0.05) (0.01)
----------- ------- ------- ------- ------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
=========== ======= ======= ======= ======= ===========
TOTAL RETURN (b) 0.08% 0.49% 1.42% 4.68% 5.13% 1.31%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 47,440 $58,005 $83,742 $99,984 $89,270 $ 30,159
Ratio of expenses to average net assets 1.00%(c) 1.00% 1.00% 1.00% 1.00% 0.99%(c)
Ratio of net investment income
to average net assets 0.16%(c) 0.51% 1.45% 4.23% 5.18% 4.00%(c)
* Less than $0.001 per share.
** Less than $0.005 per share.
(a) Commencement of operations.
(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
See notes to financial statements.
11
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 29, 2004 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ----------- -----------
COMMERCIAL PAPER - 12.5%
FLORIDA - 12.5%
City of Gainesville, Series C 0.95% 5/10/04 $ 5,000,000 $ 5,000,000
Miami-Dade County 0.95 4/8/04 2,012,000 2,012,000
Sarasota County Public Hospital, LOC Suntrust Bank 1.03 3/10/04 7,150,000 7,150,000
Sunshine State 0.97 5/14/04 1,100,000 1,100,000
Sunshine State 1.02 4/8/04 2,000,000 2,000,000
Sunshine State 1.01 4/2/04 1,000,000 1,000,000
-----------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $18,262,000) 18,262,000
-----------
MUNICIPAL BONDS AND NOTES - 14.4%
FLORIDA - 4.4%
Kissimmee Utility Authority Electric System Revenue 2.00 10/1/04 1,910,000 1,920,964
Manatee County HFA 2.00 10/1/04 1,000,000 1,005,740
Seminole County School District TAN 2.00 8/20/04 3,500,000 3,516,279
-----------
6,442,983
-----------
NEW HAMPSHIRE - 2.8%
Strafford County TAN 1.75 12/30/04 4,000,000 4,022,636
-----------
SOUTH CAROLINA - 2.8%
Charleston County School District 2.00 11/4/04 4,000,000 4,028,042
-----------
TEXAS - 4.4%
Houston Independent School District 1.05 6/15/33 5,000,000 4,999,617
Richardson Independent School District General Obligation Note 1.35 8/15/24 1,500,000 1,500,000
-----------
6,499,617
-----------
TOTAL MUNICIPAL BONDS AND NOTES (AMORTIZED COST $20,993,278) 20,993,278
-----------
VARIABLE MUNICIPAL BONDS* - 73.6%
ALASKA - 5.2%
Valdez Marine Term Revenue, Exxon Pipeline Co. Project 0.95 3/5/04 1,100,000 1,100,000
Valdez Marine Term Revenue, BP Pipelines Project, Series B 0.99 3/4/04 6,500,000 6,500,000
-----------
7,600,000
-----------
CONNECTICUT - 0.8%
Connecticut State Health & Educational Facilities Authority Revenue 0.95 3/4/04 1,200,000 1,200,000
-----------
FLORIDA - 48.5%
Bradford County HFA, Series B 0.92 3/3/04 5,000,000 5,000,000
Broward County HFA, Multi-Family, LOC Bank One 1.00 3/3/04 2,600,000 2,600,000
Capital Projects Finance Authority, LOC Bank of Scotland 0.98 3/4/04 950,000 950,000
Collier County Health Care Facilities IDR 0.95 3/4/04 4,000,000 4,000,000
Collier County Health Care Facilities IDR, LOC Fifth Third Bank 0.94 3/5/04 2,000,000 2,000,000
Dade County, Water & Sewer Systems Revenue 0.91 3/3/04 4,600,000 4,600,000
Florida Housing Finance Agency, Buena Vista, Multi-Family 0.89 3/3/04 1,000,000 1,000,000
Florida Housing Finance Agency, Hampton Lakes, Multi-Family,
LOC Credit Suisse First Boston 0.99 3/3/04 2,000,000 2,000,000
Florida Housing Finance Agency, Multi-Family, LOC Credit Suisse First Boston 0.99 3/3/04 2,400,000 2,400,000
Florida Housing Finance Corp., Charleston, Series I-A, Multi-Family Revenue 0.95 3/4/04 2,375,000 2,375,000
Florida Housing Finance Corp., Cypress Lake, Multi-Family Revenue 0.95 3/4/04 3,500,000 3,500,000
Florida State Municipal Power Agency Revenue, Stanton Project 0.94 3/3/04 1,000,000 1,000,000
Florida Gulf Coast University Financing Corp., LOC Wachovia Bank N.A 0.96 3/4/04 2,250,000 2,250,000
Halifax Hospital Medical Center, Health Care Facilities Revenue 1.00 3/3/04 1,200,000 1,200,000
Jacksonville Health Facilities Authority Hospital Revenue 0.95 3/3/04 2,600,000 2,600,000
Lakeland Energy Systems Revenue 0.95 3/3/04 8,000,000 8,000,000
Palm Beach County Revenue, Norton Gallery, Inc. Project 0.95 3/3/04 4,000,000 4,000,000
Polk County School Board COP 0.92 3/4/04 2,000,000 2,000,000
Port Orange Palmer College Project Revenue 0.95 3/4/04 6,500,000 6,500,000
St. Johns County HFA Multi-Family 0.95 3/3/04 7,600,000 7,600,000
Tampa Health Care Facilities Revenue (Adj-Lifelink Foundation, Inc. Project) 0.95 3/3/04 1,600,000 1,600,000
University North Florida Foundation Income Revenue 0.99 3/4/04 1,800,000 1,800,000
Volusia County Health Facilities Authority Revenue 0.96 3/4/04 1,700,000 1,700,000
-----------
70,675,000
-----------
See notes to financial statements.
12
VALIANT TAX-EXEMPT MONEY MARKET PORTFOLIO
Schedule of Portfolio Investments
February 29, 2004 (unaudited)
MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
---- -------- ----------- ------------
MASSACHUSETTS - 0.7%
Massachusetts State Central Artery, Series A 0.99% 3/4/04 $ 1,000,000 $ 1,000,000
------------
MICHIGAN - 0.9%
Macomb County Hospital Finance Authority Revenue 0.98 3/5/04 1,345,000 1,345,000
------------
MISSISSIPPI - 3.4%
Jackson County Chevron USA, Inc. Project, Port Facility Revenue 0.99 3/4/04 5,000,000 5,000,000
------------
NEW YORK - 4.8%
Puttable Floating Option Tax-Exempt Receipts(a) 0.95 6/17/04 2,625,000 2,625,000
New York State Energy Research & Development Authority PCR 0.95 3/5/04 4,400,000 4,400,000
------------
7,025,000
PENNSYLVANIA - 1.2%
Delaware County Industrial Development Authority PCR, LOC Bank One N.A 0.97 4/5/04 1,700,000 1,700,000
------------
PUERTO RICO - 5.3%
Commonwealth of Puerto Rico 0.95 5/26/04 6,295,000 6,295,000
Commonwealth Infrastructure Financing Authority 0.93 3/4/04 1,495,000 1,495,000
------------
7,790,000
------------
TEXAS - 0.7%
Angelina & Neches River Authority Solid Waste Revenue, Series C 0.99 3/5/04 1,000,000 1,000,000
------------
UTAH - 2.1%
Intermountain Power Supply Revenue, Series F(a) 0.90 3/15/04 3,000,000 3,000,000
------------
TOTAL VARIABLE MUNICIPAL BONDS (AMORTIZED COST $107,335,000) 1 07,335,000
------------
TOTAL INVESTMENTS (AMORTIZED COST $146,590,278) (b) - 100.5% 1 46,590,278
LIABILITIES IN EXCESS OF OTHER ASSETS - 0.5% (796,971)
------------
TOTAL NET ASSETS - 100% $ 45,793,307
============
- -----------------
* Variable rate investment. Securities payable on demand at par including
accrued interest (usually within seven days notice) and unconditionally
secured as to principal and interest by letters of credit or other credit
support agreements from major banks. The interest rates are adjustable and
are based on bank prime rates or other interest rate adjustment indeces.
The rate shown represents the rate in effect at February 29, 2004. The
maturity date shown reflects next rate change date.
(a) These instruments are payable on demand and are secured by letters of
credit or other credit support agreements from major banks.
(b) Cost and value for federal income tax and financial reporting purposes are
the same.
COP - Certificates of Participation
HFA - Housing Finance Authority
IDR - Industrial Development Revenue
LOC - Letter of Credit
PCR - Pollution Control Revenue
TAN - Tax Anticipation Note
See notes to financial statements.
13
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004 (UNAUDITED)
ASSETS:
Investments, at value $ 146,590,278
Receivables:
Interest 223,461
---------------
TOTAL ASSETS 146,813,739
---------------
LIABILITIES:
Payables:
Due to custodian $ 918,980
Dividends 83,536
Accrued expenses and other liabilities:
Investment manager 17,557
Distribution and shareholder servicing 359
---------------
TOTAL LIABILITIES 1,020,432
---------------
NET ASSETS $ 145,793,307
===============
COMPOSITION OF NET ASSETS:
Capital $ 145,906,983
Accumulated net realized loss from
investment transactions (113,676)
---------------
NET ASSETS $ 145,793,307
===============
Class A Shares
Net Assets $ 135,036,663
Shares outstanding 135,183,910
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
===============
Class B Shares
Net Assets $ 10,756,644
Shares outstanding 10,756,644
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
===============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 (UNAUDITED)
INVESTMENT INCOME:
Interest $ 872,394
-----------
TOTAL INVESTMENT INCOME 872,394
EXPENSES:
Investment manager $ 173,932
Distribution and shareholder servicing:
Class A Shares 302,720
Class B Shares 503
-----------
Total expenses before contractual
fee reimbursements 477,155
Contractual fee waivers and
expense reimbursements (302,864)
-----------
NET EXPENSES 174,291
-----------
NET INVESTMENT INCOME 698,103
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 698,103
===========
See notes to financial statements.
14
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 29, 2004 YEAR ENDED
(UNAUDITED) AUGUST 31, 2003
----------------- -----------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 698,103 $ 1,954,685
----------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 698,103 1,954,685
----------------- -----------------
DIVIDENDS:
Net investment income:
Class A Shares (697,355) (1,953,468)
Class B Shares (748) -
Class D Shares - (1,217)
----------------- -----------------
TOTAL DIVIDENDS TO SHAREHOLDERS (698,103) (1,954,685)
----------------- -----------------
INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS 3,274,268 (32,299,508)
----------------- -----------------
NET INCREASE IN NET ASSETS 3,274,268 (32,299,508)
NET ASSETS:
Beginning of period 142,519,039 174,818,547
----------------- -----------------
End of period $ 145,793,307 $ 142,519,039
================= =================
See notes to financial statements.
15
THE VALIANT FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------- --------- --------- --------- --------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
------------ --------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income 0.004 0.014 0.015 0.03 0.04 0.03
Net realized gain (loss) from investment
transactions 0.000 ** 0.000 ** 0.000 ** (0.00) * (0.00) * 0.00 *
------------ --------- --------- --------- --------- ---------
Total from investment activities 0.004 0.014 0.015 0.03 0.04 0.03
------------ --------- --------- --------- --------- ---------
DIVIDENDS
Net investment income (0.004) (0.014) (0.015) (0.03) (0.04) (0.03)
------------ --------- --------- --------- --------- ---------
Total dividends (0.004) (0.014) (0.015) (0.03) (0.04) (0.03)
------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
============ ========= ========= ========= ========= =========
TOTAL RETURN 0.40% 1.03% 1.49% 3.42% 3.67% 3.01%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 135,037 $ 142,519 $ 174,104 $ 141,464 $ 207,183 $ 288,343
Ratio of expenses to average net assets,
before fee waivers and / or expense
reimbursements 0.55%(b) 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of expenses to average net assets 0.20%(b) 0.20% 0.20% 0.20% 0.20% 0.20%
Ratio of net investment income to average
net assets 0.81%(b) 1.02% 1.47% 3.39% 3.57% 2.96%
FINANCIAL HIGHLIGHTS, CLASS B SHARES
FOR THE PERIOD
FEBRUARY 25, 2004(c) THROUGH
FEBRUARY 29, 2004 (c)
----------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000
-------------
INVESTMENT ACTIVITIES
Net investment income 0.000 **
Net realized gain (loss) from investment transactions 0.000 **
-------------
Total from investment activities 0.000
-------------
DIVIDENDS
Net investment income (0.000) **
-------------
Total dividends (0.000)
-------------
NET ASSET VALUE, END OF PERIOD $ 1.000
=============
TOTAL RETURN 0.01%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 10,757
Ratio of expenses to average net assets, before fee waivers
and / or expense reimbursements 0.55% (b)
Ratio of expenses to average net assets 0.45% (b)
Ratio of net investment income to average net assets 0.52% (b)
* Less than $0.001 per share.
** Less than $0.005 per share.
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends. Total returns for periods less than one full
year are not annualized.
(b) Annualized.
(c) Commencement of share class.
See notes to financial statements.
16
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2004
ASSETS:
Cash $ 985
----------
TOTAL ASSETS 985
LIABILITIES:
Accrued expenses and other liabilities:
Investment manager $ 364
----------
TOTAL LIABILITIES 364
----------
NET ASSETS $ 621
==========
COMPOSITION OF NET ASSETS:
Capital $ 622
Undistributed net investment income 84
Accumulated net realized loss from
investment transactions (85)
----------
NET ASSETS $ 621
==========
Class A Shares
Net Assets $ 621
Shares outstanding 622
Net Asset Value, Offering Price and
Redemption Price per share $ 1.00
==========
See notes to financial statements.
17
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2004 (a) AUGUST 31, 2003 (b)
--------------------- -------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income - -
--------------------- -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS - -
--------------------- -------------------
DIVIDENDS:
Net investment income - -
--------------------- -------------------
INCREASE IN NET ASSETS FROM CAPITAL TRANSACTIONS - -
--------------------- -------------------
NET INCREASE IN NET ASSETS
NET ASSETS
Beginning of period 621 621
--------------------- -------------------
End of year $ 621 $ 621
===================== ===================
(a) The Portfolio did not operate during the six months ended February 29, 2004.
(b) The Portfolio did not operate during the year ended August 31, 2003.
See notes to financial statements.
18
THE VALIANT FUND
U.S. TREASURY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS, CLASS A SHARES
FOR THE FOR THE YEARS ENDED
SIX MONTHS ENDED -------------------------------------------------------------
FEBRUARY 29,2004(a) 2003 (b) 2002 (c) 2001 (d) 2000 (e) 1999 (f)
------------------- --------- --------- --------- --------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income - - - 0.01 0.01 0.00 *
Net realized gain from investment
transactions - - - - - -
--------- --------- --------- --------- --------- ---------
Total from investment activities - - - 0.01 0.01 0.00 *
--------- --------- --------- --------- --------- ---------
DIVIDENDS
Net investment income - - - (0.01) (0.01) (0.00) *
--------- --------- --------- --------- --------- ---------
Total dividends - - - (0.01) (0.01) (0.00) *
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
TOTAL RETURN - - - 0.68%(g) 0.51%(g) 0.40%(g)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
Ratio of expenses to average net assets - - - 0.20%(h) 0.20%(h) 0.20%(h)
Ratio of net investment income to average
net assets - - - 5.11%(h) 4.21%(h) 3.69%(h)
* Less than $0.005 per share.
(a) The Portfolio did not operate during the six months ended February 29, 2004.
(b) The Portfolio did not operate during the year ended August 31, 2003.
(c) The Portfolio did not operate during the year ended August 31, 2002.
(d) The Portfolio operated from December 6, 2000 to January 24, 2001.
(e) The Portfolio operated from December 7, 1999 to January 19, 2000.
(f) The Portfolio operated from December 14, 1998 to January 22, 1999.
(g) Not Annualized.
(h) Annualized.
See notes to financial statements.
19
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 2004
1. ORGANIZATION:
The U.S. Treasury Money Market Portfolio, General Money Market
Portfolio and Tax-Exempt Money Market Portfolio (referred to
individually as a "Portfolio" and collectively as the "Portfolios") are
separate portfolios of The Valiant Fund. The Valiant Fund (the "Trust")
is a Massachusetts business trust, organized on January 29, 1993 and is
registered under the Investment Company Act of 1940, as amended (the
"Act"), as an open-end management investment company. The Trust is
authorized to offer five classes of shares: Class A, Class B, Class C
(has not commenced operations), Class D and Class E.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies
followed by the Portfolios in the preparation of their financial
statements. The policies are in conformity with generally accepted
accounting principles in the United States of America. The preparation
of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from
those estimates.
SECURITY VALUATION:
Investments of the Portfolios are valued at amortized cost,
which approximates value. Under the amortized cost method, discount or
premium, if any, is accreted or amortized, respectively, on a
straight-line basis to the maturity of the security.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are recorded on trade date. Security
gains and losses are calculated on the identified cost basis. Interest
income is recognized on the accrual basis and includes, where
applicable, the amortization or accretion of a premium or a discount.
REPURCHASE AGREEMENTS:
Each Portfolio may enter into repurchase agreements with an
entity whose creditworthiness has been reviewed and found satisfactory
by the Portfolios' Sub-Advisor, Reich & Tang Asset Management L.P. The
repurchase price generally equals the price paid by a Portfolio plus
interest negotiated on the basis of current short-term rates, which may
be more or less than the rate on the underlying portfolio securities.
The seller, under a repurchase agreement, is required to maintain the
collateral held pursuant to the agreement, with a market value equal to
or greater than the repurchase price (including accrued interest).
Collateral subject to repurchase agreements is held by the Portfolios'
custodian, either physically or in book entry form.
EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to
that Portfolio. Trust expenses are allocated proportionately among each
Portfolio within the Trust in relation to the net assets of each
Portfolio or another reasonable basis. Expenses specific to a class are
charged to that class.
DIVIDENDS TO SHAREHOLDERS:
The Portfolios' declare all net investment income daily as
dividends to their shareholders and distribute such dividends monthly.
Additional dividends are also paid to the Portfolios'
shareholders to the extent necessary to avoid the federal excise tax on
certain undistributed income and net realized gains of registered
investment companies.
20
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 2004
The amount of dividends from net investment income and net
realized gains are determined in accordance with U.S. income tax
regulations, which may differ from the U.S. generally accepted
accounting principles. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified
among the components of net assets; temporary differences do not
require reclassification.
FEDERAL TAXES:
Each Portfolio is a separate taxable entity for federal tax
purposes. Each Portfolio has qualified and intends to qualify each year
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code, as amended, and distribute substantially all of its
taxable net investment income and net realized gains, if any, to their
shareholders. Accordingly, no provision for federal income excise tax
is required.
3. RELATED PARTY TRANSACTIONS:
INVESTMENT ADVISER:
Integrity Management & Research, Inc. (the "Manager"), a
wholly owned subsidiary of Integrity Investments, Inc., serves as the
Investment Adviser to the Trust. The Trust pays the Manager a fee,
computed daily and paid monthly, at the annual rate of 0.20% of the
average daily net assets of each Portfolio.
Under terms of the Management Agreement, all expenses incurred
by the Portfolios are paid directly by the Manager, except for
distribution and shareholder servicing fees, Trustee fees and other
miscellaneous non-recurring fees.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN:
Integrity Investments, Inc. (the "Distributor"), an affiliate
of the manager, acts as exclusive distributor of the Trust's shares.
The Trust has adopted distribution and shareholder servicing plans for
each class of shares offered (together, the "Plans") pursuant to Rule
12b-1 of the 1940 Act. For its services, the Distributor is authorized
to receive a fee, computed daily and paid monthly, based on the average
daily net assets of each class, at the following annual percentage
rates:
CLASS FEE RATE
----- --------
Class A Shares 0.35%
Class B Shares 0.35
Class C Shares 0.65
Class D Shares 0.50
Class E Shares 0.80
EXPENSE LIMITATIONS:
The Portfolios' Adviser and Distributor have contractually
agreed to reimburse expenses and waive certain distribution fees
necessary to limit total expenses to the following rates until December
31, 2003:
DISTRIBUTION AND
CLASS SERVICING FEES WAIVER EXPENSE LIMITATION
----- --------------------- ------------------
Class A Shares 0.35% 0.20%
Class B Shares 0.10 0.45
Class C Shares 0.00 0.85
Class D Shares 0.00 0.70
Class E Shares 0.00 1.00
21
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 2004
FEE REIMBURSEMENTS:
Expenses reimbursed and fees waived by the Adviser and
Distributor are set forth on each Portfolio's Statement of Operations.
4. CAPITAL SHARE TRANSACTIONS:
Each class is authorized to issue an unlimited number of
shares with no par value. Transactions in capital and shares of
beneficial interest by class for the Portfolios for the six months
ended February 29, 2004 and year ended August 31,2003 are listed below
(amounts represent shares and dollars):
U.S. TREASURY MONEY MARKET GENERAL MONEY MARKET TAX-EXEMPT MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------- ---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
FEBRUARY 29, 2004 YEAR ENDED FEBRUARY, 29,2004 YEAR ENDED FEBRUARY 29, 2004 YEAR ENDED
(UNAUDITED) AUGUST 31, 2003 (UNAUDITED) AUGUST 31, 2003 (UNAUDITED) AUGUST 31, 2003
---------------------------------- ---------------------------------- ----------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES:
Issued 5,117,416 12,459,045 1,354,423,,494 2,785,649,642 409,809,752 642,984,337
Reinvested 24 86 190 23,362 4 11
Redeemed (11,107,978) (12,558,975) (1,341,716,653) (2,778,968,659) (417,292,132) (674,568,798)
--------------------------------- --------------------------------- --------------------------------
Net increase
(decrease) in
Class A Shares (5,990,538) (99,844) 12,707,031 6,704,345 (7,482,376) (31,584,450)
--------------------------------- --------------------------------- --------------------------------
CLASS B SHARES:
Issued 221,440,849 1,092,082,247 21,354,849 39,818,413 10,756,644 -
22,963 2,061 - - - -
Redeemed (206,048,273) (1,111,710,396) (29,959,786) (44,917,766) - -
--------------------------------- --------------------------------- --------------------------------
Net increase
(decrease) in
Class B Shares 15,415,539 (19,626,088) (8,604,937) (5,099,353) 10,756,644 -
--------------------------------- --------------------------------- --------------------------------
CLASS D SHARES:
Issued 391,112,080 981,056,095 29,158,099 210,163,036 - 1,500,791
Reinvested - - 7,008 102,115 - -
Redeemed (414,859,728) (1,020,736,681) (36,958,275) (175,979,968) - (2,215,849)
--------------------------------- --------------------------------- --------------------------------
Net increase
(decrease) in
Class D Shares (23,747,648) (39,680,586) (7,793,168) 34,285,183 - (715,058)
--------------------------------- --------------------------------- --------------------------------
CLASS E SHARES:
Issued 95,130,413 1,661,501,323 33,578,731 132,955,657 - -
Reinvested - 5 - 6 - -
Redeemed (96,340,169) (1,738,350,766) (44,145,512) (158,699,611) - -
--------------------------------- --------------------------------- --------------------------------
Net increase
(decrease) in
Class E Shares (1,209,756) (76,849,438) (10,566,781) (25,743,948) - -
--------------------------------- --------------------------------- --------------------------------
NET INCREASE
(DECREASE) IN
SHARE
TRANSACTIONS (15,532,403) (136,255,956) (14,257,855) 10,146,227 3,274,268 (32,299,508)
================================= ================================= ================================
22
THE VALIANT FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 2004
5. CONCENTRATION OF CREDIT RISK:
As of February 29, 2004, approximately 65.4% of the Tax-Exempt
Money Market Portfolio was invested in obligations of political
subdivisions of the State of Florida and, accordingly, is subject to
the credit risk associated with the non-performance of such issuers.
Approximately 50% of these investments are further secured, as to
principal and interest, by credit enhancements such as letters of
credit, municipal bond insurance, and guarantees issued by financial
institutions.
6. FEDERAL TAX INFORMATION:
All of the dividends paid for the six months ended February,
29, 2004 and the year ended August 31, 2003 by the General Money Market
Portfolio and the U.S. Treasury Money Market Portfolio are ordinary
income for federal income tax purposes.
During the six months ended February 29, 2004 and fiscal year ended
August 31, 2003, all of the distributions paid by the Tax-Exempt Money
Market Portfolio have been designated tax-exempt income distributions.
Undistributed net investment income differs from financial statement
and tax purposes primarily due to the timing of dividend payments.
For federal income tax purposes, the following Portfolios have capital
loss carryforwards as of August 31, 2003, which are available to offset
future realized gains, if any:
NAME AMOUNT EXPIRES
- -------------------------- ------------ -------
U.S. Treasury Money Market $ 230,225 2008
21,859 2009
------------
$ 252,084
============
General Money Market $ 29,268 2005
51,799 2008
------------
$ 81,067
============
Tax-Exempt Money Market $ 54,799 2004
1,943 2005
12,059 2006
2,545 2008
42,330 2009
------------
$ 113,676
============
23
MANAGEMENT OF THE TRUST
The trustees and officers of the Trust and their principal occupations during
the past five years are as follows:
RICHARD F. CURCIO PRESIDENT, TRUSTEE, CHAIRMAN OF THE BOARD
Founded Integrity Investments, Inc. (a broker/dealer) and Integrity Management &
Research, Inc.(an investment adviser) in 1992, and is currently President and
Director of each. Senior Vice President/Regional Manager for Fidelity
Institutional Services Company from 1987 to 1992. Associated with Fidelity
Distributors from 1979 to 1992.
JOHN S. CULBERTSON TRUSTEE
Retired. Trust Consultant with Fidelity Investments Institutional Services Co.
from 1990 to 1993.
RUFUS C. CUSHMAN JR. TRUSTEE
Retired. Money Manager with Fidelity Management & Research Corp. From 1968
through 1994.
H. WILLIS DAY TRUSTEE
Retired. Former Senior Vice President of Southeast Bank, FLA, N.A.
ROGER F. DUMAS TRUSTEE
Private investor since 1987.
KENNETH J. PHELPS TRUSTEE
President, Principal and Director of Reliance Trust Company, Atlanta, GA since
1992. Chairman, Chief Executive Officer and Director, C&S/Sovran Trust Company,
Inc. from 1987 to 1992.
DENIS R. CURCIO VICE PRESIDENT, SECRETARY AND TREASURER
Mr. Curcio joined Integrity Investments, Inc. the distributor of The Valiant
Fund in June of 1998 after graduating from Jacksonville University with a BS in
Finance. Aged 27, Denis is responsible for oversight and administration of The
Valiant Fund.
24
BRENDEN R. CURCIO VICE PRESIDENT
Mr. Curcio joined Integrity Investments, Inc., the distributor of The Valiant
Fund in June of 1994 after graduating from Stetson University with a BBA in
Finance. Aged 31, Brenden is responsible for institutional sales of The Valiant
Fund in the Northeast and Midwest.
25
Insert a copy of the report transmitted to stockholders pursuant to Rule 30e-1
under the Act (17 CFR 270.30e-1).]
ITEM 2. CODE OF ETHICS.
Not applicable with semi annual filing..
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable with semi annual filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable with semi annual filing.
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable with semi annual filing.
ITEM 8. [RESERVED]
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: NONE
ITEM 10. CONTROLS AND PROCEDURES.
a) The President and Treasurer of the registrant have evaluated the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Act) within 90 days from the date hereof. Based on that
evaluation, they have concluded that the registrant's disclosure controls
and procedures were effective.
b) There has been no change in the registrant's internal controls over
financial reporting (as defined in Rule 30a-3(d) under the Act) that
occurred during the registrant's last fiscal half-year that has materially
affected, or is likely to materially affect, the registrant's internal
control over financial reporting.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) The Valiant Fund
-------------------------------------------------------------------
By (Signature and Title) /s/ Richard F. Curcio
-------------------------------------------------------
Richard F. Curcio, Chairman of the Board and President
Date 2/29/04
---------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Richard F. Curcio
-------------------------------------------------------
Richard F. Curcio, Chairman of the Board and President
Date 2/29/04
---------------------------------------------------------------------------
By (Signature and Title) /s/ Denis R. Curcio
-------------------------------------------------------
Denis R. Curcio, Treasurer
Date 2/29/04
---------------------------------------------------------------------------